Life with Choices.
Sim vs life as a game - Both a game, but Sims provides a road map on how to win, and gauges to monitor.
Climbers vs Relaxers - In context of climbing a mountain, and the worry of a coastal flooding. There are two type of personalities, those who are compeitive and wants to reach the top of the mountain and there are those who rather stay near the beach. The problem is we live in a coastal flooding area, there are many uncertainties. But at the same time, the climbers strive to reach the top, but there are no end to the climb. Where is the safe spot? are there any? They will keep climbing till they cant climb anymore. Probably at a point where they forgotten why they are climbing. And for those who dont prepare, and rather enjoy the view of the clear water beach. During High Tides, their savings gets washed away and left with nothing. But that will keep those to continue to strive to rebuild and wait for the next high tide, or do they convert to a climber. There are those who have a mix of both personalities. Those with a goal, who climbs to reach a fine spot and stay still and enjoy the view. Where they are comfortable and know that high tides wont reach them. but little did they know, they also live in a world of tsunamis. Is there an escape? Yes, what impresses me are those who work with others to create an elevator/stairs to reach as high as they want, without burning every muscle climbing. Leverage is Great, but also increase dependency.
Reverse Stock split - implement a 1 for 4 reverse stock split. A reduction in the number of a corporation's shares outstanding that increases the par value of its stock or its earnings per share. The market value of the total number of shares (market capitalization) remains the same.
Options benefits
Leverage
Another advantage with options is leverage. You can get started in options with only a fraction of the money you would normally need to get into the actual stock. And many option strategies come with a guaranteed limited risk.
It's these advantages, and more, that can make options a perfect addition to someone's portfolio.
What's interesting, however, is that even though the popularity of options has soared, they are still not as well known or understood as much as stocks. But they should be.
Bullish
If you're bullish on a stock, you can buy a call option on it and make money as it goes up.
Momentum stocks and Aggressive Growth stocks are probably the best kinds of stocks to use for this. These are stocks that are on the move with some of the most explosive upside potential.
Bearish
If you're bearish, you can buy a put option and make money as the price goes down.
Look for stocks trading at excessive valuations. Focus in on the ones with downward earnings estimate revisions. And if they are below their major moving averages like the 50-day and 200-day moving average, even better.
Big Move in Either Direction
If you believe a big move could occur in either direction, but you're not sure which way, you can make money with a straddle or a strangle. This entails buying both a call and a put at the same time.
One of the best times to use this strategy is before an earnings announcement, or an important event. Some of the best stocks for this option strategy are high beta stocks. These are stocks that can move big, and that's exactly what you want to see happen with this kind of strategy.
Once again, in order for a stock to make a big move, there usually needs to be a catalyst. One of the most reliable catalysts out there for big moves (up or down) is earnings reports. But lately, there have been plenty of political events, not just in the US, but around the world, that have sent stocks sharply in one direction or another. This can create the kind of potential volatility to really make a strategy like this work.
Slower, Moderate Move
If you're expecting a stock to go up or down, but you expect the move to be moderate or slower, then spreads are a great strategy for this.
For example, a bull call spread involves buying a nearby strike and selling a farther out one. If the stock goes up, but slowly, the nearby call you bought should increase in value, in spite of some time decay loss. But the call option you wrote will benefit from time decay, thus making the spread more profitable than had you only purchased a call. You can do this with a put spread as well. It works the same way, but instead, you make money as the market goes down.
This is a great strategy for stocks you expect to see move, but not necessarily with a big splash that you would see with the top rated or bottom rated stocks.
Sideways
How about making money if the market goes sideways? You cannot make money in a stock if it goes sideways. But you absolutely can in an option.
Calendar spreads are one such strategy. Iron condors are another. (These are simply called 'combinations'.) These are strategies used by many professional traders to consistently make money. It's great seeing stocks go up. It can also be great seeing stocks go down, if you're properly positioned. But more often than not, stocks trade sideways, within a range.
With these types of strategies, a stock can go up from where you got in, or down from where you got in, or just sit still - and you can still make money. As long as it stays within that range, you profit. With such a low risk and high probability, every investor should have these in their portfolio.
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